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Cornered telcos consult lawyers

Following communications minister Kapil Sibal's announcement of sending notifications to new operators for not meeting eligibility criteria at the time of filing of application for 2G licences, all new telecom operators spent Tuesday closeted with their lawyers. HT reports.

india Updated: Nov 30, 2010 21:20 IST
HT Correspondent

Following communications minister Kapil Sibal's announcement of sending notifications to new operators for not meeting eligibility criteria at the time of filing of application for 2G licences, all new telecom operators spent Tuesday closeted with their lawyers.

Though Sibal did not name the companies that would be issued notices, an official of the department of telecommunications (DoT) listed their names — Unitech Infrastructure, Unitech Builders & Estates, Azare Properties, Hudson Properties, Nahan Properties, Adonis Project, Aska Projects and Volga Properties (all Unitech group companies).

Also on the list are Shipping Stop Dotcom (presently Loop Telecom), Allianz Infratech (which merged with Etisalat DB Telecom), Datacom Solutions, (Videocon group owned), Swan Telecom (presently Etisalat DB Telecom) and S Tel.

These companies own 85 licences out of 122 licences issued in January 2008 on first-come, first-served basis.

Sistema Shyam, which was issued pan-India licence, would not be issued any notification on account of not meeting eligibility conditions. However, it will be issued show-cause notices in 10 circles for not meeting roll out obligations.

"Our legal advisors say that the change in objects is valid from the date of resolution passed by AGM and not from the date of registration with Registrar of Companies (ROC)," said a promoter. "Registration is only a compliance and according to the Companies Act, sanction of Company Law Board is not needed for alteration of objects clause."

All applicants must ensure that their Memoranda of Association (MOA) should have an object stating the company can do business in telecom.

If a company has to alter MOA, this is done in two steps – one, the board passes a resolution and two, it is registered with the ROC. According to Sibal, the new provision becomes effective on the date of registration. Moreover, some companies did not have the required paid-up capital on the date of filing application.